Union Pacific Railroad v. Dolese Bros.

163 F. App'x 652
Court of Appeals for the Tenth Circuit·Decided December 28, 2005·No. 05-6087·Unpublished

Opinions

ORDER AND JUDGMENT*

STEPHEN H. ANDERSON, Circuit Judge.

Union Pacific Railroad Company (“Union Pacific”) filed this action seeking to enforce an indemnity provision in a contract relating to an industrial spur line on property belonging to the Dolese Brothers Company (“Dolese”). The district court denied Union Pacific’s motion for summary judgment and granted Dolese’s motion for summary judgment. Union Pacific appeals, and we affirm.

BACKGROUND

On May 13, 1985, Union Pacific and Dolese entered into an Industrial Track Agreement (“ITA”) to establish an industrial spur line on Dolese’s Sand Plant property in Dover, Oklahoma. As part of the construction of that line, derail devices were located close to each end of the spur line. The derail device is a safety mechanism that derails any railroad car which attempts to roll onto the main railroad line. Union Pacific padlocks the derail devices and maintains complete control over the keys to the padlocks. Union Pacific employees operate the derail devices as needed.

The ITA provided that Dolese “shall at all times keep the area between the rails and within the lateral clearance area ... free and clear of debris and/or obstructions of any kind or nature.” ITA at 4, Appellant’s App. Vol. I at 16. The Agreement also provided that Dolese would indemnify Union Pacific against “any and all claims, demands, expenses, costs and judgments” resulting from Dolese’s failure to perform its obligations, including the obligation to keep “debris and/or obstructions of any kind” off the spur line. Id.

On May 16, 2001, Union Pacific employee Charles M. Sykes suffered a back injury while attempting to operate the derail device at the Dolese Sand Plant. Union Pacific alleges that “Sykes[’j injury occurred because Dolese failed to properly maintain the derail device by allowing it to become full of sand and grit.” Appellant’s Opening Br. at 4. Union Pacific and Sykes reached a settlement in the sum of $180,000, with an additional $8,449.47 in attorney’s fees, in satisfaction of the rail[654] road’s nondelegable duty under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 51, to provide a safe workplace.

Union Pacific then brought this diversity action seeking to enforce either the indemnification or the contribution provision of the ITA. Both parties filed motions for summary judgment. The district court granted Dolese’s motion and denied Union Pacific’s. This appeal followed.1

Union Pacific argues the district court erred in (1) finding that sand in, on and around the derail device did not constitute “debris and/or obstructions of any kind or nature” under the ITA; (2) failing to find that the indemnity provision in the ITA requires Dolese to indemnify Union Pacific for the settlement costs and attorney’s fees incurred in the Sykes action; (3) denying Union Pacific a jury trial on the factual question of whether sand constituted “debris and/or obstructions of any kind or nature” under the ITA; (4) “determining that the derail device ... was not contemplated under the [ITA]”; (5) granting summary judgment to Dolese; and (6) denying summary judgment to Union Pacific. Appellant’s Opening Br. at 1-2.

DISCUSSION

We review de novo the district court’s grant of summary judgment. Zurich N. Am. v. Matrix Serv., Inc., 426 F.3d 1281, 1287 (10th Cir.2005); Mo. Pac. R.R. Co. v. Kan. Gas & Elec. Co., 862 F.2d 796, 798 (10th Cir.1988). We apply the same standards as did the district court. Thus, “[s]ummary judgment shall be granted if there is ‘no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.’ ” Zurich N. Am., 426 F.3d at 1287 (quoting Fed. R.Civ.P. 56(c)). Further, we “must resolve all ambiguities and draw all factual inferences in favor of the non-moving party.” Id.; see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). As a federal court sitting in diversity, we must apply Oklahoma substantive law. See Reed v. Landstar Ligon, Inc., 314 F.3d 447, 450-51 (10th Cir.2002).

Under the FELA, “ ‘a railroad has the nondelegable duty to provide its employees with a safe place to work even when they are required to go onto the premises of a third party over which the railroad has no control.’ ” Mo. Pac. R.R. Co., 862 F.2d at 797 (quoting Shenker v. Balt. & Ohio R.R. Co., 374 U.S. 1, 7, 83 S.Ct. 1667, 10 L.Ed.2d 709 (1963)). Accordingly, Union Pacific required a guarantee of indemnification for expenses incurred as a result of injuries its employees might suffer while working on Dolese’s property. The ITA therefore contained the following language:

(f) [Dolese] shall at all times keep the area between the rails and within the lateral clearance area hereinbefore provided free and clear of debris and/or obstructions of any kind or nature....
(g) [Dolese] agrees to indemnify [Union Pacific] and save it harmless from and against any and all claims, demands, expenses, costs and judgments arising or growing out of loss of or damage to property whosesoever, or injury to or death of persons whomsoever, including the parties hereto, their agents and employees, occurring directly or indirectly by reason of any breach of the foregoing covenants to be kept by [Dolese] ... and regardless of whether caused or contributed to by any acts or omissions [655] o[f] [Union Pacific], its agents or employees.

ITA § 5(f), (g), Appellant’s App. Vol. I at 16.

The Oklahoma courts apply the following rules in construing the language of a contract:

If language of a contract is clear and free of ambiguity the court is to interpret it as a matter of law, giving effect to the mutual intent of the parties at the time of contracting. Whether a contract is ambiguous and hence réquires extrinsic evidence to clarify the doubt is a question of law for the courts.

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Union Pacific Railroad v. Dolese Bros., 163 F. App'x 652 (10th Cir. 2005).

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